The long-term goal of this project is an operational, satistically estimated model of the health care sector that can provide a basis for policy discussions as well as a framework for teaching and future research. More specifically, the current project will develop an econometric model of the health care sector, estimate its parameters, and investigate its properties. Several key relationships and subsectors will be studied in substantial detail. An important objective of these individual studies is the development of general types of economic specifications that can be used for describing such different types of health sector behavioral relations as the pricing of physicians' services, hospital construction, use of paramedical personnel, demand for physicians' services, etc. Special programs such as Medicare and the Hill-Burton subsidies will be examined.